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The Chairman
Victor Niederhoffer

10/26/04
Hippocratic Oath

Often I am asked by a day trader what to do when they have a predicament. I usually point out that their vig and commissions and implicit bid asked spreads (no it's not just the one penny difference between the stated ), as well as their short-term mentality makes it very difficult (one euphemizes). And that the market like nature likes to take from the weak and give to the strong. Osborne was particularly brilliant on this point and he always talked about the contribution of the fixed and slow moving to the market firmament and he doubtless would have fulminated in response to such queries. (One of his favorite catch phrases to illustrate a point was, "Someone's going to eat crow here, raw squawking and fully feathered, and something tells me it ain't going to be me.) On the contrary, I AM MUCH MORE DIGNIFIED. I usually say something to the effect that a slightly longer-term horizon like a century or more would put the wind at your back a la the Triumphal Trio, and would not subject you to special moves of the father and the mistress as they know what you got to do late in day or earlier. What brings this to mind was another typical query I often receive. Some things look very bearish today, and some things look bullish. Is there any reason to go with the Triumphals and against the SagAprecabelFlecks ? I always answer: "Look, you're a short-term trader. The market will always be there. It's too difficult. Go back into business when it's a bit clearer and you have more staying power, and or the little partner is not on your back."

I got a good response when I told this meal for a lifetime to someone today. He said, "Yes, there is a Hippocratic oath for short-term traders as well as doctors. Thanks for reminding me. I wish I followed it more often." Presumably he was referring to the part of the oath that relates to doing no harm and taking no procedure unless it is clearly helpful ("That I will exercise my Art, solely for the cure of my patients and the prevention of disease and will give no drugs and perform no operation for a criminal purpose and far less suggest such thing") rather than the Hippocratic state of paralysis that often occurs before death.

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